The Japanese Cabinet Office announced today that gross domestic product (GDP) in the first quarter of 2022 fell by 1% year-on-year. This is due to the impact of the Omicron-type COVID-19 virus, which has spread throughout the country. In addition, supply chain problems and rising import prices have increased pressure on businesses and households.
The decline in GDP in the first quarter was due to a general slowdown in trade, including the disruption in consumer spending after the Japanese government announced half-hearted measures to combat the spread of COVID-19. This results in shortened business hours as economic activity is curtailed during the severe virus outbreak.
The four-quarter decline in GDP due to the COVID-19 pandemic has set Japan’s economy far behind the rest of the world, which is recovering.
Most analysts predict that the Japanese economy will recover in the coming quarters. However, the war in Ukraine and the slowdown in the Chinese economy are likely to affect the outlook of the Japanese economy.